EXHIBIT 1.3
MADISON GAS AND ELECTRIC COMPANY
____________ SHARES
COMMON STOCK
UNDERWRITING AGREEMENT
____________, 1998
Underwriters
Addresses
Dear Sirs:
Madison Gas and Electric Company, a Wisconsin corporation (the
"Company"), proposes to issue and sell to the several Underwriters named in
Schedule I hereto (the "Underwriters"), for whom you are acting as
representatives ("Representatives"), _____________ shares of the common stock,
$1 par value, of the Company (the "Firm Shares").
The Company also proposes to issue and sell to the several
Underwriters not more than an additional ______ shares of its common stock, $1
par value (the "Additional Shares"), if and to the extent that the
Representatives shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such shares of common stock granted to the
Underwriters in Section 2. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "Shares". The shares of the common
stock, $1 par value, of the Company to be outstanding after giving effect to the
sales contemplated hereby are hereinafter referred to as the "Common Stock".
The Company has filed with the Securities and Exchange Commission (the
"SEC") a registration statement on Form S-3 (No. 333-_____) for the registration
of certain securities, including the Shares, under the Securities Act of 1933
(the "1933 Act") and the offering thereof from time to time in accordance with
Rule 415 of the rules and regulations of the SEC under the 1933 Act (the "1933
Act Regulations"). Such registration statement has been declared effective by
the SEC. As used in this Agreement, (i) "Registration Statement" means such
registration statement, as
amended or supplemented to the date hereof; (ii) "Preliminary Prospectus"
means each prospectus (including all documents incorporated therein by
reference) specifically relating to the Shares included in the Registration
Statement before it became effective under the 1933 Act, including any
prospectus filed with the SEC pursuant to Rule 424(a) of the 1933 Act
Regulations; (iii) "Basic Prospectus" means the prospectus (including all
documents incorporated therein by reference) specifically relating to the
Shares included in the Registration Statement; and (iv) "Prospectus" means
the Basic Prospectus together with any prospectus amendment or supplement
(including in each case all documents incorporated therein by reference)
specifically relating to the Shares, as filed with, or mailed for filing to,
the SEC pursuant to paragraph Rule 424(b) of the 1933 Act Regulations.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to each Underwriter as follows:
(i) DUE INCORPORATION AND QUALIFICATION. The Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the state of Wisconsin with corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Prospectus; and the Company is not required to be
qualified as a foreign corporation to transact business in any other
jurisdiction.
(ii) SUBSIDIARIES. The Company has no significant subsidiaries, as
"significant subsidiary" is defined in Rule 405 of the 1933 Act
Regulations.
(iii) REGISTRATION STATEMENT AND PROSPECTUS. At the time the
Registration Statement became effective, the Registration Statement
complied, and on the date hereof complies, in all material respects, with
the requirements of the 1933 Act and the 1933 Act Regulations. The
Registration Statement, at the time it became effective did not, on the
date hereof does not, and at all times during the period specified in
Section 3(k) hereof will not, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Prospectus,
as of the date hereof does not, and at all times during the period
specified in Section 3(K) will not, contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; PROVIDED, HOWEVER, that
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the representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or Prospectus
made in reliance upon and in conformity with information furnished to
the Company in writing by any Underwriter through the Representatives
expressly for use in the Registration Statement or Prospectus.
(iv) INCORPORATED DOCUMENTS. The documents incorporated by reference in
any Preliminary Prospectus or the Prospectus, at the time they were or
hereafter are filed with the SEC, complied or when so filed will comply, as
the case may be, in all material respects with the requirements of the
Securities Exchange Act of 1934 ("1934 Act") and the rules and regulations
promulgated thereunder ("1934 Act Regulations"), and, when read together
with the other information in the Prospectus, did not and will at all times
during the period specified in Section 3(k) hereof not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were or are made, not
misleading.
(v) ACCOUNTANTS. The accountants who issued their reports on the
financial statements included or incorporated by reference in the
Prospectus are independent public accountants within the meaning of the
1933 Act and the 1933 Act Regulations.
(vi) FINANCIAL STATEMENTS. The financial statements and any supporting
schedules of the Company included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the financial
position of the Company as of the dates indicated and the results of its
operations and cash flows for the periods specified; and, except as stated
therein, said financial statements have been prepared in conformity with
generally accepted accounting principles in the United States applied on a
consistent basis; and any supporting schedules included in the Registration
Statement present fairly the information required to be stated therein.
(vii) AUTHORIZATION AND VALIDITY OF THIS AGREEMENT. This Agreement has
been duly authorized and, upon execution and delivery by the
Representatives on behalf of the Underwriters, will be a valid and binding
agreement of the Company.
(viii) The authorized capital stock of the Company conforms to the
description thereof contained in the Prospectus.
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(ix) The shares of Common Stock outstanding prior to the issuance of
the Shares have been duly authorized and are validly issued, fully paid and
non-assessable, except to the extent that they are assessable as provided
in Section 180.0622 of the Wisconsin Business Corporation Law.
(x) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, except to the extent that they are
assessable as provided in Section 180.0622 of the Wisconsin Business
Corporation Law, and the issuance of the Shares will not be subject to any
preemptive rights.
(xi) MATERIAL CHANGES OR MATERIAL TRANSACTIONS. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, except as may otherwise be stated therein or contemplated
thereby, there has been no material adverse change in the condition,
financial or otherwise, of the Company, whether or not arising in the
ordinary course of business.
(xii) NO CONFLICTS. The execution and delivery of this Agreement and
the consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate action and will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company is a party
or by which it may be bound or to which any of the property or assets of
the Company is subject, nor will such action result in any violation of the
Articles of Incorporation or By-laws, as restated or amended, of the
Company or any law, administrative regulation or administrative or court
order or decree.
(xiii) REGULATORY APPROVALS. The Company has made all necessary
filings and obtained all necessary consents, orders or approvals from the
Federal Energy Regulatory Commission ("FERC") and the Public Service
Commission of Wisconsin ("PSCW") in connection with the issuance and sale
of the Shares, and no consent, approval, authorization, order or decree of
any other court or governmental agency or body is required for the
consummation by the Company of the transactions contemplated by this
Agreement, except such as may be required under state securities ("Blue
Sky") laws.
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(b) ADDITIONAL CERTIFICATIONS. Any certificate signed by any director or
officer of the Company and delivered to the Representatives shall be deemed a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby on the date of such certificate.
SECTION 2. PURCHASE AND SALE OF SHARES.
(a) FIRM SHARES. On the basis of the representations and warranties
herein contained, but subject to the terms and conditions herein set forth, the
Company hereby agrees to sell to the several Underwriters, and each Underwriter
agrees, severally and not jointly, to purchase from the Company, for $_____ per
Share ("Purchase Price"), the number of Firm Shares set forth in Schedule I
hereto opposite the name of such Underwriter.
(b) ADDITIONAL SHARES. On the basis of the representations and warranties
herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to sell to the Underwriters the Additional Shares, and the
Underwriters shall have a one-time right to purchase, severally and not jointly,
up to ________ Additional Shares for the Purchase Price per Share. Additional
Shares may be purchased solely for the purpose of covering over-allotments made
in connection with the offering of Firm Shares. If any Additional Shares are to
be purchased, each Underwriter agrees, severally and not jointly, to purchase
the number of Additional Shares (subject to such adjustment to eliminate
fractional shares as the Representatives may determine) that bears the same
proportion to the total number of Additional Shares to be purchased as the
number of Firm Shares set forth in Schedule I hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
(c) The Company is advised by the Representative that the Underwriters
propose to make a public offering of their respective portions of the Shares as
soon after this Agreement has become effective as in the judgment of the
Representatives is advisable. The Company is further advised by the
Representatives that the Shares are to be offered to the public initially at
$______ per Share (the "Public Offering Price," which term includes such price
as it may be changed from time to time by the Representatives) and to certain
dealers selected by the Representatives at a price that represents a concession
not in excess of $__ per Share under the Public Offering Price, and that any
Underwriter may allow, and such dealers may allow, a concession, not in excess
of $_____ per Share, to any Underwriter or to certain other dealers.
(d) PAYMENT FOR FIRM SHARES. Payment for the Firm Shares shall be made by
certified or official bank check or checks payable
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to the order of the Company in New York Clearing House funds at the offices
of Sidley & Austin, One First National Plaza, Chicago, Illinois, at 10:00
A.M., local time, on _________, __, or at such other time on the same or such
other date, not later than __________, __, as shall be designated in writing
by the Representatives and the Company. The time and date of each such
payment are hereinafter referred to as the "Closing Date".
(e) PAYMENT FOR ADDITIONAL SHARES. Payment for any Additional Shares
shall be made by certified or official bank check or checks payable to the order
of the Company in New York Clearing House funds at the offices of Sidley &
Austin, One First National Plaza, Chicago, Illinois, at 10:00 A.M., local time,
on such date (which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor later than ten business days after the giving
of the notice hereinafter referred to), not later than _____, as shall be
designated in a written notice from the Representatives to the Company of their
determination, on behalf of the Underwriters, to purchase a number, specified in
said notice, of Additional Shares, as shall be designated in writing by the
Representatives and the Company. The time and date of such payment are
hereinafter referred to as the "Option Closing Date". The notice of the
determination to exercise the option to purchase Additional Shares and of the
Option Closing Date may be given at any time within 30 days after the date of
this Agreement.
(f) CERTIFICATES. Certificates for the Firm Shares and Additional Shares
shall be in definitive form and registered in such names and in such
denominations as the Representatives shall request in writing not later than two
full business days prior to the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and Additional Shares
shall be delivered to the Representatives on the Closing Date or the Option
Closing Date, as the case may be, for the respective accounts of the several
Underwriters.
SECTION 3. COVENANTS OF THE COMPANY.
The Company covenants with the Underwriters as follows:
(a) RULE 424(B) FILING. Promptly following execution of this Agreement,
to cause the Prospectus, including as part thereof a prospectus supplement
relating to the Shares, to be filed with, or mailed for filing to, the SEC
pursuant to Rule 424(b)(2) and (3) under the 1933 Act and the Company will
promptly advise the Underwriters when such filing or mailing has been made.
Prior to such filing or mailing, the Company will cooperate with the
Underwriters in the preparation of such supplement to the
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Prospectus to assure that the Underwriters have no reasonable objection to
the form or content thereof when filed or mailed.
(b) FERC OR PSCW ACTION. To advise the Representatives promptly of any
additional action by the FERC or PSCW pertaining to the Shares.
(c) COPIES OF 1933 ACT DOCUMENTS. To furnish promptly to each
Representative and to counsel for the Underwriters one signed copy of the
Registration Statement as originally filed and each amendment thereto filed
prior to the date hereof and relating to the Shares, and a copy of the
Prospectus filed with the SEC, including all documents incorporated therein by
reference and all consents and exhibits filed therewith.
(d) CONFORMED COPIES. To deliver promptly to the Representatives such
reasonable number of the following documents as the Representatives may
request: (i) conformed copies of the Registration Statement (excluding
exhibits other than this Agreement), (ii) the Prospectus and (iii) any
documents incorporated by reference in the Prospectus.
(e) REVISIONS OF PROSPECTUS -- MATERIAL CHANGES. If at any time during
the period specified in Section 3(k) any event shall occur or condition exist as
a result of which it is necessary, in the reasonable opinion of counsel for the
Underwriters or counsel for the Company, to further amend or supplement the
Prospectus in order that the Prospectus will not include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein not misleading in the light of the circumstances existing
at the time the Prospectus is delivered to a Share purchaser, or if it shall be
necessary, in the reasonable opinion of either such counsel, to amend or
supplement the Registration Statement or the Prospectus in order to comply with
the requirements of the 1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with the SEC such amendment or supplement, whether by
filing documents pursuant to the 1934 Act, the 1933 Act or otherwise, as may be
necessary to correct such untrue statement or omission or to make the
Registration Statement and Prospectus comply with such requirements.
(f) NOTICES TO REPRESENTATIVES. To advise the Representatives promptly
during the period specified in Section 3(k), (i) when any post-effective
amendment to the Registration Statement becomes effective, (ii) of any request
or proposed request by the SEC for an amendment or supplement to the
Registration Statement, to the Prospectus, to any document incorporated by
reference in any of the foregoing or for any
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additional information, (iii) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or any order
directed to the Prospectus or any document incorporated therein by reference
or the initiation or threat of any stop order proceeding or of any challenge
by the SEC to the accuracy or adequacy of any document incorporated by
reference in the Prospectus, (iv) of receipt by the Company of any
notification with respect to the suspension of the qualification of the
Shares for sale in any jurisdiction or the initiation or threat of any
proceeding for that purpose and (v) of the happening of any event which makes
untrue any statement of a material fact made in the Registration Statement
(insofar as the Registration Statement relates to or covers the Shares) or
the Prospectus, which causes the Registration Statement or the Prospectus to
omit to state therein a material fact necessary to make the statements
therein not misleading or which requires the making of a change in the
Registration Statement or the Prospectus in order to make any material
statement therein not misleading.
(g) STOP ORDER. If, during the period specified in Section 3(k), the SEC
shall issue a stop order suspending the effectiveness of the Registration
Statement, to make every reasonable effort to obtain the lifting of that order
at the earliest possible time.
(h) EARNINGS STATEMENT. As soon as practicable, to make generally
available to its security holders and to deliver to the Representatives an
earnings statement, conforming with the requirements of Section 11(a) of the
1933 Act and Rule 158 of the 1933 Act Regulations, covering a period of at least
twelve months beginning after the effective date of the Registration Statement
as defined in Rule 158(c) of the 1933 Act Regulations.
(i) SHAREHOLDER AND OTHER REPORTS. During the period of five years
hereafter, to furnish to the Representatives, (i) as soon as available, a copy
of each report of the Company mailed to its shareholders or report filed by the
Company with the SEC and (ii) from time to time such other information
concerning the Company as the Representatives may reasonably request.
(j) BLUE SKY QUALIFICATIONS. The Company will endeavor, in cooperation
with the Representatives, to qualify the Shares for offering and sale under
the applicable securities laws of such states and other jurisdictions of the
United States as the Representatives may designate, and will maintain such
qualifications in effect for the period specified in Section 3(k); provided,
however, that the Company shall not be obligated to file any general consent
to service of process or to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified. The Company will file such
statements and reports as
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may be required by the laws of each jurisdiction in which the Shares have
been qualified as above provided. The Company will promptly advise the
Representatives of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Shares for sale in any such state
or jurisdiction or the initiating or threatening of any proceeding for such
purpose.
(k) 1934 ACT FILINGS. The Company, during the period when the Prospectus
is required to be delivered under the 1933 Act, will file promptly all documents
required to be filed with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d)
of the 1934 Act.
(l) STAND-OFF AGREEMENT. The Company will not, without the prior written
consent of the Representatives, offer or sell, or enter into any agreement to
sell, any shares of common stock of the Company or any securities convertible
into or exercisable or exchangeable for such common stock, for a period of 30
days after the date of the initial public offering of the Shares, other than (i)
the Shares to be sold hereunder and (ii) any actions taken under its Investors
Plus Plan.
(m) COSTS. To pay all costs incident to the authorization, issuance, sale
and delivery of the Shares; the costs incident to the preparation, printing and
filing under the 1933 Act of the Registration Statement and the Prospectus and
any amendments, supplements and exhibits thereto; the costs incident to the
preparation, printing and filing of the documents and any amendments and
exhibits thereto required to be filed by the Company under the 1934 Act; the
costs of distributing the Registration Statement as originally filed and each
amendment and post-effective amendment thereof (including exhibits), any
Preliminary Prospectus, the Prospectus and any documents incorporated by
reference in any of the foregoing documents; the costs of printing this
Agreement; the listing of the Shares on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") National Market; the fees and
expenses of qualifying the Shares under the securities laws of the several
jurisdictions as provided in subsection (j) of this Section and of preparing and
printing a Blue Sky Memorandum, (including fees of counsel to the Underwriters
not to exceed $_____ in the aggregate); and all other costs and expenses
incident to the performance of the Company's obligations under this Agreement;
PROVIDED that, except as provided in this Section 3(m),the Underwriters shall
pay their own costs and expenses, including the fees and expenses of their
counsel, any transfer taxes on the Shares which they may sell and the expenses
of advertising any offering of the Shares made by the Underwriters.
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(n) To use reasonable efforts to maintain the inclusion of the Common
Stock in the NASDAQ National Market (or on a national securities exchange) for a
period of five years after the date hereof.
SECTION 4. CONDITIONS OF OBLIGATIONS.
The several obligations of the Underwriters under this Agreement with
respect to the Shares are subject to the accuracy, on the date hereof, on the
Closing Date and on the Option Closing Date, of the representations and
warranties on the part of the Company herein and to the accuracy of the
statements of the Company's officers made in any certificate furnished pursuant
to the provisions hereof, to the performance and observance by the Company of
all of its covenants and agreements herein contained and to each of the
following additional terms and conditions applicable to the Shares:
(a) NO STOP ORDER. No stop order suspending the effectiveness of the
Registration Statement nor any order directed to any document incorporated by
reference in the Prospectus shall have been issued and prior to that time no
stop order proceeding shall have been initiated or threatened by the SEC and no
challenge shall have been made by the SEC to the accuracy or adequacy of any
document incorporated by reference in the Prospectus; any request of the SEC for
inclusion of additional information in the Registration Statement or the
Prospectus or otherwise shall have been complied with and there shall be no
material adverse change in the condition, financial or otherwise, of the
Company, whether or not arising in the ordinary course of business.
(b) LEGAL MATTERS. All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement, the Shares,
the form of the Registration Statement, the Prospectus and all other legal
matters relating to this Agreement and the transactions contemplated hereby
shall be satisfactory in all respects to _________________, counsel for the
Underwriters, and the Company shall have furnished to such counsel all documents
and information that they may reasonably request to enable them to pass upon
such matters (it being understood that such counsel shall not be required to
pass on any financial statements, financial data, statistical data and
supporting schedules included in the Prospectus).
(c) OPINION OF COMPANY COUNSEL. Stafford, Rosenbaum, ▇▇▇▇▇▇ & ▇▇▇▇▇▇,
counsel to the Company, shall have furnished to the Representatives a letter
addressed to the Underwriters and dated the Closing Date stating their opinion
to the effect that:
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(i) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Wisconsin,
with corporate authority to own and operate its properties, and valid
franchises, licenses and permits adequate for the conduct of its business,
as described in the Prospectus;
(ii) this Agreement has been duly authorized, executed and delivered
by the Company;
(iii) the certificates for the Shares are in due and proper form; the
issue and sale of the Shares by the Company in accordance with the terms of
this Agreement have been duly and validly authorized by the necessary
corporate action;
(iv) the Shares conform as to legal matters with the statements
concerning them made in the Prospectus, and such statements accurately set
forth the matters respecting the Shares required to be set forth in the
Prospectus;
(v) the Shares have been duly authorized and, when issued and
delivered to the Underwriters pursuant to this Agreement against payment
of the Purchase Price per Share therefore, will be validly issued, fully
paid and non-assessable, except to the extent that they are assessable as
provided in Section 180.0622 of the Wisconsin Business Corporation Law, and
the issuance of the Shares will not be subject to any preemptive rights.
(vi) the order of the PSCW referred to in Section 1(a)(x) hereof
pertaining to the Shares have been duly entered and, to the best of the
knowledge of such counsel, are still in force and effect; and no further
approval, authorization, consent, certificate or order of any state or
federal commission or regulatory authority (other than in connection or
compliance with the provisions of the securities or Blue Sky laws of any
jurisdiction) is necessary with respect to the issue and sale of the Shares
as contemplated by this Agreement;
(vii) the Registration Statement has become effective under the 1933
Act and, to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are pending or
threatened under the 1933 Act;
(viii) the Registration Statement and the Prospectus and each
amendment or supplement thereto comply as to form in all material respects
with the requirements of the 1933 Act
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and the 1933 Act Regulations (except that such counsel need express no
opinion as to the financial statements, financial data, statistical data
or supporting schedules contained therein);
(ix) such counsel does not know of any legal or governmental
proceeding required to be described in the Prospectus which is not
described as required, or of any contract or document of a character
required to be described or incorporated in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration Statement
which is not described, incorporated or filed as required;
(x) neither the execution and delivery of this Agreement nor the
issuance and sale of the Shares in accordance with the terms of this
Agreement nor the consummation of the transactions herein contemplated, nor
compliance with the terms and provisions hereof, will conflict with,
violate or result in a breach of any law, any administrative regulation or
any court decree known to such counsel to be applicable to the Company,
conflict with or result in a breach of any of the terms, conditions or
provisions of the Articles of Incorporation or the By-laws, as restated or
amended, of the Company or of any material agreement or instrument known to
such counsel to which the Company is a party or by which the Company is
bound or constitute a default thereunder;
(xi) the documents referred to in Section 1(a)(v) hereof, as of their
respective filing dates, complied as to form in all material respects with
the applicable requirements of the 1934 Act and the 1934 Act Regulations
(except that such counsel do not need to express any opinion as to the
financial statements, financial data, statistical data or supporting
schedules contained therein);
(xii) the statements made in the Prospectus which are stated therein
to have been made on the authority of such counsel have been reviewed by
them and, as to matters of law and legal conclusion, are correct; and
(xiii) except as set forth in the Prospectus, to the best knowledge of
such counsel there are no pending or threatened legal or administrative
proceedings to which the Company is a party or in which any of its property
is the subject wherein an unfavorable decision, ruling or finding would
adversely affect the transactions contemplated by this Agreement or the
validity or enforceability against the Company of this Agreement;
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and such letter shall additionally state that nothing has come to the attention
of such counsel that would lead them to believe that the Registration Statement
(other than the financial statements, financial data, statistical data and
supporting schedules included therein, as to which they do not need to express
any belief), at the time it became effective or at the Closing Date, contained
or contains an untrue statement of a material fact or omitted or omits to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (other than the
financial statements, financial data, statistical data and supporting schedules
included therein, as to which they do not need to express any belief), at the
time it was first filed with the SEC pursuant to Rule 424(b) under the 1933 Act
or at the Closing Date contained or contains any untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(d) OPINION OF COMPANY SPECIAL COUNSEL. Sidley & Austin, special counsel
to the Company, shall have furnished to the Representatives a letter addressed
to the Underwriters and dated the Closing Date stating in their opinion
substantially to the effect set forth in clauses (ii), (iii), (iv), (v), (vi),
(vii) and (viii) of paragraph (c) of this Section 4 and to the further effect
that:
(i) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Wisconsin,
with corporate authority to own and operate its properties as described in
the Prospectus; and
(ii) neither the execution and delivery of this Agreement nor the
issuance and sale of the Shares in accordance with the terms of this
Agreement nor the consummation of the transactions herein contemplated, nor
compliance with the terms and provisions hereof, will conflict with,
violate or result in a breach of any of the terms, conditions or provisions
of Articles of Incorporation or By-laws, as restated or amended, of the
Company, or of any material agreement or instrument known to such counsel
to which the Company is a party or by which the Company is bound or
constitute a default thereunder;
and such letter shall additionally state that nothing has come to the attention
of such counsel that would lead them to believe that the Registration Statement
(other than the financial statements, financial data, statistical data and
supporting schedules included therein, as to which they do not need to express
any belief), at
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the time it became effective or at the Closing Date contained or contains an
untrue statement of a material fact or omitted or omits to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus (other than the financial
statements, financial data, statistical data and supporting schedules
included therein, as to which they do not need to express any belief) as at
the time it was first filed with the SEC pursuant to Rule 424(b) under the
1933 Act or at the Closing Date contained or contains any untrue statement of
a material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
For the purpose of rendering the foregoing opinions, Sidley & Austin may
rely exclusively upon the opinion Stafford, Rosenbaum, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel
for the Company, delivered to you pursuant to paragraph (c) of this Section 4 as
to the organization of the Company and as to all other matters of Wisconsin law
and upon the factual representations made in this Agreement and upon
certificates of officers of the Company and public officials.
(e) OFFICERS' CERTIFICATE. The Company shall have furnished to the
Representatives a certificate, dated the Closing Date, of its Chairman of the
Board, its President or a Vice President and its Treasurer or an Assistant
Treasurer stating that, to the best of their knowledge after reasonable
investigation, the representations and warranties of the Company in Section 1
hereof are true and correct as of the date hereof; the Company has complied with
all its agreements contained herein; and the conditions set forth in Sections
4(a), 4(h), 4(i)and 4(j) hereof have been fulfilled.
(f) COMFORT LETTER. The Representatives shall have received a letter from
PricewaterhouseCoopers LLP dated as of the Closing Date and in form and
substance satisfactory to the Representatives, to the effect that:
(i) They are independent public accountants with respect to the
Company within the meaning of the 1933 Act and the 1933 Act Regulations;
(ii) In their opinion, the financial statements and supporting
schedule(s) of the Company audited by them and included or incorporated by
reference in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act and
the 1933 Act Regulations with respect to registration statements on Form
S-3 and the 1934 Act and the 1934 Act Regulations;
14
(iii) They have performed specified procedures, not constituting an
audit, including a reading of the latest available interim financial
statements of the Company, a reading of the minute books of the Company
since the end of the most recent fiscal year with respect to which an audit
report has been issued, inquiries of and discussions with certain officials
of the Company responsible for financial and accounting matters with
respect to the unaudited consolidated financial statements of the Company
included in the Registration Statement and Prospectus and the latest
available interim unaudited financial statements of the Company, and such
other inquiries and procedures as may be specified in such letter, and on
the basis of such inquiries and procedures nothing came to their attention
that caused them to believe that: (A) the unaudited consolidated financial
statements of the Company included in the Registration Statement and
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the 1934 Act and the 1934 Act
Regulations or were not fairly presented in conformity with generally
accepted accounting principles in the United States applied on a basis
substantially consistent with that of the audited financial statements
included therein, or (B) at a specified date not more than five days prior
to the date of such letter, there was any change in the capital stock or
any increase in long-term debt of the Company or any decrease in the common
shareholders' equity of the Company other than for the declaration of
regular quarterly dividends, in each case as compared with the amounts
shown on the most recent balance sheet of the Company included in the
Registration Statement and Prospectus or, during the period from the date
of such balance sheet to a specified date not more than five days prior to
the date of such letter, there were any decreases, as compared with the
corresponding period in the preceding year, in operating revenues or net
income of the Company, except in each such case as set forth in or
contemplated by the Registration Statement and Prospectus or except for
such exceptions (e.g. inability to determine such decreases because of
insufficient accounting information available after the date of such most
recent balance sheet) enumerated in such letter as shall have been agreed
to by the Representatives and the Company; and
(iv) In addition to the examination referred to in their report
included or incorporated by reference in the Registration Statement and the
Prospectus, and the limited procedures referred to in clause (iii) above,
they have carried out certain other specified procedures, not constituting
an audit, with respect to certain amounts, percentages and financial
information which are included or
15
incorporated by reference in the Registration Statement and Prospectus
and which are specified by the Representatives, and have found such
amounts, percentages and financial information to be in agreement with
the relevant accounting, financial and other records of the Company
identified in such letter.
(g) OPINION OF UNDERWRITERS' COUNSEL. ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇,
Chicago, Illinois, as counsel for the Underwriters, shall have furnished to the
Representatives on the Closing Date such opinions with respect to the validity
of the Shares and with respect to the Registration Statement, the Prospectus,
and other related matters as the Representatives may reasonably require.
(h) FERC AND PSCW ORDERS. The order of the PSCW referred to in Section
1(a)(x) hereof shall be in full force and effect and no proceedings to suspend
the effectiveness of either such order shall be pending or threatened.
(i) NO MATERIAL ADVERSE CHANGE. Subsequent to the date of the most recent
financial statements incorporated by reference in the Prospectus, there shall
have been no material adverse change in the condition (financial or otherwise),
of the Company, whether or not arising in the ordinary course of business,
except as set forth in the Registration Statement and the Prospectus, including
the documents incorporated by reference therein, as of the effective date of
this Agreement.
(j) OTHER DOCUMENTS. Counsel to the Underwriters shall have been
furnished with such documents and opinions as such counsel may reasonably
require for the purpose of enabling such counsel to pass upon the issuance and
sale of Shares as herein contemplated and related proceedings, or in order to
evidence the accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein contained; and
all proceedings taken by the Company in connection with the issuance and sale of
Shares as herein contemplated shall be satisfactory in form and substance to the
Representatives and to counsel to the Underwriters.
If any condition specified in this Section 4 shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Representatives by written notice to the Company and any such termination shall
be without liability of any party to any other party, except that the covenant
regarding provision of an earnings statement set forth in Section 3(h) hereof,
the provisions concerning payment of expenses
16
under Section 3(m) hereof, the indemnity and contribution agreement set forth
in Section 6 hereof, the provisions concerning the payment of expenses in
Section 8 hereof and the provisions set forth under "Parties" of Section 12
hereof shall remain in effect.
SECTION 5. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company to sell and deliver the Shares are subject
to the following conditions precedent:
(a) NO STOP ORDER. At or before the date hereof, no stop order
suspending the effectiveness of the Registration Statement nor any order
directed to any document incorporated by reference in the Prospectus shall
have been issued and prior to that time no stop order proceeding shall have
been initiated or threatened by the SEC and no challenge shall have been
made by the SEC to the accuracy or adequacy of any document incorporated by
reference in the Prospectus; any request of the SEC for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.
(b) PSCW ORDERS. The order of the PSCW referred to in Section
(1)(a)(x) hereof shall be in full force and effect and no proceeding to
suspend the effectiveness of either such order shall be pending or
threatened.
In case any of the conditions specified above in this Section 5 shall not have
been fulfilled on the date hereof, this Agreement may be terminated by the
Company by delivering written notice of termination to the Representatives. Any
such termination shall be without liability of any party to any other party
except to the extent provided in Section 3(m), and Section 6 hereof.
SECTION 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF THE UNDERWRITERS. The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus (or
any amendment or supplement thereto) or the omission or alleged omission
17
therefrom of a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred, (including,
subject to Section 6(c) hereof, the fees and disbursements of counsel)
reasonably incurred in investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); and PROVIDED, FURTHER, that
this indemnity agreement with respect to any preliminary prospectus shall not
inure to the benefit of the Underwriter from whom the person asserting any such
losses, liabilities, claims, damages or expenses purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any such amendment or
supplement thereto, but excluding documents incorporated or deemed to be
incorporated by reference therein) is provided to the Underwriter but was not
sent or given by or on behalf of such Underwriter to such person, if such is
required by law, at or prior to the written confirmation of the sale of such
Shares to such person and if the Prospectus (as so amended or supplemented, but
excluding documents incorporated or deemed to be incorporated by reference
therein) would have corrected the defect giving rise to such loss, liability,
claim, damage or expense, it being understood that this proviso shall have no
application if such defect shall have been corrected in a
18
document which is incorporated or deemed to be incorporated by reference in
the Prospectus.
(b) INDEMNIFICATION OF THE COMPANY. Each Underwriter agrees to indemnify
and hold harmless the Company, its directors, each of its officers who signed
the Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto) in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) GENERAL. Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure so to notify an indemnifying
party shall not relieve such indemnifying party from any liability which it may
have otherwise than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of such action. In no
event shall the indemnifying parties be liable for the fees and expenses of more
than one counsel (in addition to any local counsel) for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances.
The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i)
counsel for the indemnified party concludes that the use of counsel chosen by
the indemnifying party to represent the
19
indemnified party would present such counsel with a conflict of interest,
(ii) the actual or potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have been advised by counsel that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party.
(d) CONTRIBUTION. If the indemnification provided for in this Section is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to herein, then each indemnifying party,
in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and each Agent on the
other from the sale to or through each Agent of the Notes or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of each Agent on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations; provided, however, that in no
case shall any Agent be responsible for any amount in excess of the total
underwriting discounts and commission received by such Agent in connection with
the sale of the Notes to or through such Agent. The relative benefits received
by the Company on the one hand and each Agent on the other in connection with
the sale of the Notes shall be deemed to be in the same proportion as the total
commissions and underwriting discounts received by such Agent to the date of
such liability bear to the total sales price from the sale of Notes to or
through such Agent to the date of such liability. The relative fault of the
Company on the one hand and of each Agent on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by such Agent and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
20
The Company and the Agents agree that it would not be just and equitable if
contribution pursuant to this Section were determined by pro rata allocation or
by any other method of allocation which does not take account of the
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section, no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as such Underwriter, and each director of the Company and
each officer of the Company who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of
1933 Act, shall have the same rights to contribution as the Company.
SECTION 7. TERMINATION.
The Representatives may terminate this Agreement, immediately upon notice
to the Company, at any time prior to the Closing Date (i) if there has been,
since the date of this Agreement or since the respective dates as of which
information is given in the Registration Statement, any material adverse change
in the condition, financial or otherwise, of the Company, whether or not arising
in the ordinary course of business, or (ii) if there shall have occurred any
outbreak or escalation of major hostilities in which the United States is
involved or any other substantial national or international calamity or crisis
the effect of which is such as to make it, in the judgment of the
Representatives, impracticable or inadvisable to market the Shares, or (iii) if
trading in any securities of the Company has been suspended by the SEC or a
national securities exchange or in the NASDAQ National Market, or if trading
generally on the New York Stock Exchange shall have been suspended, or minimum
or maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by said exchange or by order of the SEC or any
other governmental authority, or if a banking moratorium shall have been
declared by either Federal or New York authorities, or (iv) if there shall have
come to the attention of the Representatives any facts that would cause the
Representatives to believe that the
21
Prospectus, at the Closing Date, contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at the Closing
Date, not misleading.
SECTION 8. PAYMENT OF EXPENSES IN CERTAIN CIRCUMSTANCES.
If the purchase of the Shares by the Underwriters is not consummated for
any reason other than a default by one or more of the Underwriters, the Company
shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 3(m) hereof, the respective obligations of the Company and
the Underwriters pursuant to Section 6 hereof shall remain in effect, and the
Company will reimburse the Representatives for the reasonable out-of-pocket
expenses of the Underwriters, not exceeding $10,000, and for the fee and
disbursements of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, Chicago, Illinois, the Underwriters
agreeing to pay such expenses, fee and disbursements in any other event. In no
event will the Company be liable to any of the Underwriters for damages on
account of loss of anticipated profits.
SECTION 9. DEFAULT BY UNDERWRITERS.
If one or more of the Underwriters shall fail at the Closing Date to
purchase the Shares which it or they are obligated to purchase under this
Agreement (Defaulted Shares"), the Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Shares in such amounts as may be agreed upon and upon the terms
herein set forth; if, however, the Representatives shall not have completed such
arrangements within such 24-hour period, then:
(a) if the amount of Defaulted Shares does not exceed 10% of the
amount of the Shares, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the amount of Defaulted Shares exceeds 10% of the amount of
the Shares, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section 9 shall relieve any
defaulting Underwriter from liability in respect of its default.
22
In the event of any such default which does not result in a
termination of this Agreement, either the Representatives or the Company shall
have the right to postpone the Closing Date for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements.
SECTION 10. NOTICES.
Unless otherwise provided herein, all notices required under the terms and
provisions hereof shall be in writing, either delivered by hand, by mail or by
telex, telecopier or telegram, and any such notice shall be effective when
received at the address specified below.
If to the Company:
Madison Gas and Electric Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Fax: ▇▇▇-▇▇▇-▇▇▇▇
If to the Representatives:
or at such other address as such party or parties may designate from time to
time by notice duly given in accordance with the terms of this Section 10.
SECTION 11. GOVERNING LAW.
This Agreement and all the rights and obligations of the parties shall be
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed in the State of New York. Any
suit, action or
23
proceeding brought by the Company against the Underwriters in connection with
or arising under this Agreement shall be brought solely in the state or
federal court of appropriate jurisdiction located in the Borough of
Manhattan, The City of New York.
SECTION 12. PARTIES.
This Agreement shall inure to the benefit of and be binding upon each
Underwriter and the Company and their respective successors. Nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their respective
successors and the controlling persons and officers and directors referred to in
Section 6 and their heirs and legal representatives, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the parties hereto and
respective successors and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Shares shall be deemed to be a
successor by reason merely of such purchase.
SECTION 13. EXECUTION IN COUNTERPARTS.
This Agreement may be executed in counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
24
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
the several Underwriters and the Company in accordance with its terms.
Very truly yours,
MADISON GAS AND ELECTRIC COMPANY
By:
---------------------------
Name:
Title:
Accepted:
Names of Representatives
By:
---------------------------------
Name:
Title:
On behalf of each of the Underwriters
25
SCHEDULE I
NAME ADDRESS NUMBER OF SHARES
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